Traditional Chinese medicine is still being extensively used for treatment of liver disease in China. The anti-viral herbs, Phyllanthus amarus, P. niruri and P. urninaria, and Oxymatrine extracted from Sophora flavecientis and S. subprostratae, have been shown to have a remarkable HBV suppressing effect with a serum conversion rate for HBeAg and HBV DNA around 45%, similar to that of IFN-α. The anti-inflammatory compound, Stronger NeoMinophagen C (SNMC), is a Japanese preparation of glycerrhizin, extracted from Glyceriza glabra, which has shown an effective rate of ALT and AST normalization and reduction to < 60 U/L in 65.6% and 73.5% of patients. Compound 861, made of 10 herbs with Salvia miltiorrhiza as its chief component, has been shown experimentally to be effective in suppressing fibrogenesis, enhancing collagen degradation, and inhibiting TIMP expression. Clinically, an open trial of 2000 patients showed improvement of symptoms in 83% and normalization of serum ALT in 82%. In a controlled study of 107 patients with HBV-related diseases, double liver biopsies showed that the fibrosis reversal rate after 6 months treatment with Cpd 861 was 78% in S2, 82% in S3 (precirrhotic stage) and 75% in S4 (early cirrhosis), as assessed by Scheuer’s and Chevallier’s criterion. In conclusion, traditional Chinese medicine has great potential in the treatment of chronic hepatitis B.